Question: 1

The board of directors of Express Airlines Ltd is considering an offer from the board of directors of Easy Airways Ltd, a company involved in the same type of business, for the two companies to amalgamate or merge their businesses because both companies are competing in a fairly small market. The proposal is that Easy Airways Ltd will acquire and hold all the assets and liabilities of Express Airlines Ltd. Express Airlines Ltd will then be deregistered and cease to exist. Neither Easy Airways Ltd nor any person related to it holds or controls any voting rights in Express Airlines Ltd. The board of directors of Express Airlines Ltd suspects that a group of shareholders holding between 10% and 20% of the voting rights in Express Airlines Ltd will be opposed to the amalgamation or merger because Express Airlines Ltd is far more successful than Easy Airways Ltd, and they want to retain their shares in Express Airlines Ltd. The board seeks your advice regarding the possibility of this group of shareholders being able to prevent the amalgamation or merger.

With reference to the Companies Act 71 of 2008, advise the board of directors of Express Airlines Ltd on how (if at all) the group of shareholders opposed to the amalgamation or merger would be able to prevent the amalgamation or merger from taking place. (15)

Question 2

The directors of Haulage Logistics Ltd are unsure about the provisions of the Companies Act 71 of 2008 that regulate the appointment of company secretaries. They have been approached by Insights Corporate Services (Pty) Ltd which has indicated to them that, in addition to providing certain human resources and payroll services, it can provide a variety of corporate secretarial services to Haulage Logistics Ltd.

Discuss whether Insights Corporate Services (Pty) Ltd may validly be appointed as the company secretary of Haulage Logistics Ltd. (5)